Nova Scotia’s offshore gas industry has taken a major hit.
The lead player in the Sable Offshore Energy Project has announced it will not proceed with plans to expand the development..
ExxonMobil said Thursday it will not extend the life of its $2 billion Sable Offshore Energy Project, blaming what it calls project economics.
Paul MacEachern of the Nova Scotia Offshore Onshore Technologies Association tells the CBC ExxonMobil can’t proceed with any expansion plans because the price of gas is currently at a record low and the new exploration wouldn’t be economical.
MacEachern calls the news discouraging, pointing out that once the well goes dry, it will leave Deep Panuke as the only offshore project in Nova Scotia.
It’s also not good news for the province’s treasury, which benefits from the Sable project to the tune of about $200 million a year.
Energy Minister Bill Estabrooks says Exxon made a business decision which must be respected – but says there’s no denying the impact it will have on provincial finances.
“Well, there’s no need to sugarcoat this,” he said. “This is a big blow to the offshore and it’s a big blow to some of the budgetary decisions we’re going to have to make over the next number of months and years.”
He’s also hoping things could change within a couple of years to make the Sable gas field expansion worth the cost.